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Tesla lowers price of China Model 3 to undercut BMW and Mercedes in strategic play
Tesla reduced the price of its Rear-Wheel Drive Made-in-China (MIC) Model 3 to RMB 299,050 or $42,919 after government subsidies. The price of the mass-produced electric sedan was initially pegged at $50,000, but in a surprise update on Friday, the Elon Musk-led electric carmaker lowered its price beneath a major psychological barrier of RMB 300,000, just days before the significant January 7 date. The price of the Dual Motor All-Wheel Drive Model 3 Long Range and Performance variant remains the same at 439,900 yuan ($63,086) and 509,900 yuan ($73,124), respectively.
The 16 percent price reduction on locally-produced Model 3 is made possible by new energy subsidies recently announced by the Chinese government. Tesla offers as much as RMB 24,750 savings for private purchases and RMB 17,325 for those operating new energy passenger cars. The Tesla China website now displays the adjusted prices of the locally-made Model 3s.
Tesla’s price reduction puts Model 3 in a category that’s strategically aimed at the entry-level luxury sedan category, with concentrations on Mercedes C Class and BMW 3 Series.
The question is if you were a Chinese customer, what would you buy?
1. A Tesla Model 3 starting at ¥299,050
2. A BMW 3 Series starting at ¥313,900
3. A Mercedes C300 starting at ¥308,000— Legacy 🚗 is f**ked (@tesla4k) January 3, 2020
Here comes the first order confirmation right after MIC #Model3 price drop today. More sales are on the way. Now Model 3 costs less than Merc C Class and BMW 3 Series. More young ppl will be able to afford Model 3s. Shoutout to @elonmusk @teslacn pic.twitter.com/A5S8qWcrif
— Ray (@ray4tesla) January 3, 2020
The latest development follows the announcement of the electric carmaker that the second round of Made-in-China Model 3 deliveries will happen on Jan. 7 at the Gigafactory Shanghai facility where the first 15 units of the mass-produced electric sedan were symbolically handed over to employees of Tesla.
The company also revealed during the Gigafactory 3 Delivery Ceremony that 30 percent of the parts used to build the Model 3 in China is locally-sourced, but with plans to completely localize its supply chain and open the possibility to more price adjustments in the future.
The cheaper entry-level Model 3 can help Tesla lure more customers away from local electric car makers and global brands in the largest EV market in the world. Tesla believes China could become the biggest market for its Model 3 and it might well be a key market that can help it achieve sustained profitability.
Recently, Tesla also announced that the Gigafactory 3 in Shanghai has achieved its Model 3 production goal and has been rolling out 280 cars per 10-hour shift or roughly 1,500 units a week. It plans to ramp up production and will likely hit 3,000 Model 3 a week when more production workers join the frontline.
The China arm of the Palo Alto, California-based company has been doing a hiring spree to add more people to help in different production line positions such as quality control, welding, painting, powertrain, and assembly, among others.
The first deliveries of the Made-in-China Model 3 happened exactly 357 days after the Gigafactory facility broke ground, an amazing feat for the first car plant in China wholly owned by a foreign carmaker.
Elon Musk
Tesla CEO Elon Musk announces major update with texting and driving on FSD
“Depending on context of surrounding traffic, yes,” Musk said in regards to FSD v14.2.1 allowing texting and driving.
Tesla CEO Elon Musk has announced a major update with texting and driving capabilities on Full Self-Driving v14.2.1, the company’s latest version of the FSD suite.
Tesla Full Self-Driving, even in its most mature and capable versions, is still a Level 2 autonomous driving suite, meaning it requires attention from the vehicle operator.
You cannot sleep, and you should not take attention away from driving; ultimately, you are still solely responsible for what happens with the car.
The vehicles utilize a cabin-facing camera to enable attention monitoring, and if you take your eyes off the road for too long, you will be admonished and advised to pay attention. After five strikes, FSD and Autopilot will be disabled.
However, Musk announced at the Annual Shareholder Meeting in early November that the company would look at the statistics, but it aimed to allow people to text and drive “within the next month or two.”
He said:
“I am confident that, within the next month or two, we’re gonna look at the safety statistics, but we will allow you to text and drive.”
“I am confident that, within the next month or two, we’re gonna look at the safety statistics, but we will allow you to text and drive.”
Does anyone think v14.3 will enable this? pic.twitter.com/N2yn0SK70M
— TESLARATI (@Teslarati) November 23, 2025
Today, Musk confirmed that the current version of Full Self-Driving, which is FSD v14.2.1, does allow for texting and driving “depending on context of surrounding traffic.”
Depending on context of surrounding traffic, yes
— Elon Musk (@elonmusk) December 4, 2025
There are some legitimate questions with this capability, especially as laws in all 50 U.S. states specifically prohibit texting and driving. It will be interesting to see the legality of it, because if a police officer sees you texting, they won’t know that you’re on Full Self-Driving, and you’ll likely be pulled over.
Some states prohibit drivers from even holding a phone when the car is in motion.
It is certainly a move toward unsupervised Full Self-Driving operation, but it is worth noting that Musk’s words state it will only allow the vehicle operator to do it depending on the context of surrounding traffic.
He did not outline any specific conditions that FSD would allow a driver to text and drive.
News
Tesla Semi just got a huge vote of confidence from 300-truck fleet
The confidential meeting marks a major step for the mid-sized carrier in evaluating the electric truck for its regional routes.
The Tesla Semi is moving closer to broader fleet adoption, with Keller Logistics Group wrapping up a key pre-production planning session with the electric vehicle maker’s team this week.
The confidential meeting marks a major step for the mid-sized carrier in evaluating the electric truck for its regional routes.
Keller’s pre-production Tesla Semi sessions
Keller Logistics Group, a family-owned carrier with over 300 tractors and 1,000 trailers operating in the Midwest and Southeast, completed the session to assess the Tesla Semi’s fit for its operations. The company’s routes typically span 500-600 miles per day, positioning it as an ideal tester for the Semi’s day cab configuration in standard logistics scenarios.
Details remain under mutual NDA, but the meeting reportedly focused on matching the truck to yard, shuttle and regional applications while scrutinizing economics like infrastructure, maintenance and incentives.
What Keller’s executives are saying
CEO Bryan Keller described the approach as methodical. “For us, staying ahead isn’t a headline, it’s a habit. From electrification and yard automation to digital visibility and warehouse technology, our teams are continually pressure-testing what’s next. The Tesla Semi discussion is one more way we evaluate new tools against our standards for safety, uptime, and customer ROI. We don’t chase trends, we pressure-test what works,” Keller said.
Benjamin Pierce, Chief Strategy Officer, echoed these sentiments. “Electrification and next-generation powertrains are part of a much broader transformation. Whether it’s proprietary yard systems like YardLink™, solar and renewable logistics solutions, or real-time vehicle intelligence, Keller’s approach stays the same, test it, prove it, and deploy it only when it strengthens service and total cost for our customers,” Pierce said.
News
Tesla extends FSD Supervised ride-alongs in Europe by three months
Needless to say, it does appear that FSD fever is starting to catch in Europe.
Tesla appears to be doubling down on its European Full Self-Driving (Supervised) push, with the company extending its demo ride-along program by three months until the end of March 2026. The update seems to have been implemented due to overwhelming demand.
Needless to say, it does appear that FSD fever is starting to catch in Europe.
Extended FSD demonstrations
Tesla EU Policy and Business Development Manager Ivan Komušanac shared on LinkedIn that the company is offering ride-along experiences in Germany, France and Italy while working toward FSD (Supervised) approval in Europe.
He noted that this provides a great feedback opportunity from the general public, encouraging participants to record and share their experiences. For those unable to book in December, Komušanac teased more slots as “Christmas presents.”
Tesla watcher Sawyer Merritt highlighted the extension on X, stating that dates now run from December 1, 2025, to March 31, 2026, in multiple cities including Stuttgart-Weinstadt, Frankfurt and Düsseldorf in Germany. This suggests that the FSD ride-along program in Europe has officially been extended until the end of the first quarter of 2026.
Building momentum for European approval
Replies to Merritt’s posts buzzed with excitement, with users like @AuzyMale noting that Cologne and Düsseldorf are already fully booked. This sentiment was echoed by numerous other Tesla enthusiasts on social media. Calls for the program’s expansion to other European territories have also started gaining steam, with some X users suggesting Switzerland and Finland as the next locations for FSD ride-alongs.
Ultimately, the Tesla EU Policy and Business Development Manager’s post aligns with the company’s broader FSD efforts in Europe. As per recent reports, Tesla recently demonstrated FSD’s capabilities for Rome officials. Reporters from media outlets in France and Germany have also published positive reviews of FSD’s capabilities on real-world roads.
Tesla CEO Elon Musk announces major update with texting and driving on FSD
Tesla Semi just got a huge vote of confidence from 300-truck fleet
